2024-01-04 03:10:11
Growth forecast 0.2%p↓… Consumption improvement is limited due to high inflation and interest rates
Construction investment expected to be -1.2%… Number of employed people expected to increase by 230,000
Exports increased for three consecutive months following last month (Busan = Yonhap News) Reporter Park Seong-je = Containers are piled up at Busan Port on the 1st. The Ministry of Trade, Industry and Energy announced on the 1st that exports last year amounted to $632.7 billion, down 7.4% from the previous year. Imports decreased by 12.1% to $642.7 billion. As a result, the trade balance showed a deficit of $10 billion. Last month, exports increased for three consecutive months to $57.66 billion. The December trade surplus recorded $4.48 billion. 2024.1.1 psj19@yna.co.kr
(Sejong = Yonhap Infomax) Reporter Choi Wook = The government lowered Korea’s economic growth forecast for this year by 0.2 percentage points (p) to 2.2%.
Consumer prices are expected to rise by 2.6%, and the number of employed people is expected to increase by 230,000.
In the ‘2024 Economic Policy Direction’ announced on the 4th, the government predicted this year’s real gross domestic product (GDP) growth rate to be 2.2%.
It was 0.2 percentage points lower than the forecast (2.4%) presented in the ‘Economic Policy Direction for the Second Half of 2023’ in July last year.
Kim Byeong-hwan, First Vice Minister of Strategy and Finance, explained, “The export sector has begun to recover as expected,” but “consumption’s (recovery) power has weakened slightly in the third and fourth quarters of last year.”
He added, “If you look at the forecast, construction investment is negative,” adding, “The burden on the construction sector may have had an impact in lowering this year’s growth forecast.”
Compared to the forecasts of major domestic and foreign institutions, the figures are the same as those of the Korea Development Institute (KDI), the International Monetary Fund (IMF), and the Asian Development Bank (ADB).
It is lower than the Organization for Economic Cooperation and Development (OECD, 2.3%) and higher than the Bank of Korea and the Korea Institute of Finance, which suggested 2.1%.
It is also higher than the average forecast of overseas investment banks (IB) (2.1%) as of the end of November last year, compiled by the International Finance Center.
Consumer prices are rising by 3% this year… Agricultural products rose 6.0% (Seoul = Yonhap News) Reporter Jin Yeon-su = This year, consumer prices rose in the mid-3% range, continuing the trend of high prices. The inflation rate in the last month was 3.2%, maintaining a similar level to the previous month (3.3%). According to ‘December 2023 and Annual Consumer Price Trends’ announced by Statistics Korea on the 29th, this year’s consumer price index was 111.59 (2020 = 100), up 3.6% from last year. Agricultural, livestock, and marine products rose 3.1%, mainly agricultural products (6.0%) and marine products (5.4%). This year, apples (24.2%), tangerines (19.1%), strawberries (11.1%), and green onions (18.1%) showed large increases compared to last year. The photo shows a citizen shopping at a large supermarket in downtown Seoul. 2023.12.29 jin90@yna.co.kr
The government expects that the economic recovery will continue this year, centered on exports, as global trade and the global semiconductor industry improve.
As a result, the economic growth rate was expected to be 0.8%p higher than last year (1.4%).
However, it is expected that the construction investment sector will also experience difficulties as improvement in private consumption is limited due to the prolonged effects of high inflation and high interest rates.
Looking at real GDP by sector, the growth rate of private consumption was presented at 1.8%, and facility investment was expected to increase by 3.0%.
On the other hand, construction investment is expected to decrease by 1.2%.
As international raw material prices stabilize, the consumer price inflation rate is expected to slow to 2.6% from 3.6% last year.
Vice Minister Kim predicted, “The inflation rate will start at around 3% at the beginning of this year and gradually stabilize towards the second half of the year,” adding, “It will converge to the low 2% range by the end of the year.”
The number of employed people is expected to increase by 230,000 as face-to-face service industry jobs, which increased significantly last year, return to normal levels.
This is a decrease of about 90,000 from last year’s increase in the number of employed people (320,000).
Despite the slowdown in population growth, the employment rate (ages 15 and older) is expected to rise by 0.2 percentage points from the previous year to 62.8% due to the steady increase in the number of employed people.
The current account surplus is expected to expand significantly from the previous year ($31 billion) to $50 billion.
Due to the recovery in exports, the surplus in the goods balance is expected to increase to $55 billion, but the service balance is expected to have a deficit of $5 billion due to increased overseas travel.
wchoi@yna.co.kr
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This article was published on the Infomax financial information terminal at 12:09, 2 hours earlier.
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